Product footprinting evolution to revolution
The 7th Product Carbon Footprinting World Forum in April 2012 and confirmed my belief that product footprinting will transition from evolutionary to revolutionary over the next few years. Speakers from leading corporations, governmental agencies and international NGOs painted a picture of progress across many fronts with scaling of government-backed schemes, increasing maturation of footprinting standards and guidance, and expanding levels of engagement by the corporate sector across the globe. Momentum in product footprinting is evident, but we have not yet seen the rise of product sustainability as a transformational initiative within the sustainability toolbox.
One development that could accelerate the transition is the Grenelle 2 product labeling pilot: a national trial in provision of product environmental indicators at consumer level by product-owning companies (information on the scheme here). An impressive total of 168 volunteering companies are participating in the trial – selected from 230 applicants – which covers a wide range of product sectors. A recent survey of the 29 participating companies in the Food and Beverage sector conducted by the French government offers illumination on the corporate perspective for product footprinting. The majority of companies saw “Anticipating regulation” as their primary reason for engaging in the experiment: this fits with our collective wisdom that regulation is the most compelling trigger for corporate sustainability action. More surprising revelations from the survey were that 75% of company respondents said they would continue to voluntarily declare environmental information about their products, and 64% of respondents would like to see widespread implementation of product environmental labeling – only 22% of respondents were against. Why does this matter? A report will be presented to parliament in 2013 and if the initiative is considered a success, it could lead to a legal requirement for the provision of product footprints information for select environmental indicators, such as carbon, water and energy. Legislation requiring corporate product footprinting – real or anticipated – would bring a new level of engagement in product footprinting for many companies. But any route towards national regulation for product footprinting within an EU member state is fraught with obstacles; not least the real or construed identification of product environmental declarations as a trade barrier. Perhaps this is getting ahead of ourselves; with a recent change of government in France, the Grenelle 2 scheme may not complete as originally architected – this initiative was after all launched by the displaced political party.
But regulation is not critical for adoption of product footprinting – there are many powerful initiatives built around private schemes and commercial contexts. The PCF World Forum also featured a presentation from the General Services Administration (GSA) in the US, an organization planning to leverage existing product footprinting labeling standards and schemes in response to a presidential executive order for government agencies to enable ‘sustainable acquisition’. In 2011 the GSA Acquisition Services Fund represented a budget of ~US$10 billion from federals customers. The GSA seeks to simplify sustainable procurement for the federal acquisition community and increase market share for providers of sustainable products through implementing guidelines for governmental buyers on the product labeling or certification schemes that can reliably differentiate sustainable products. It is great to see the GSA using a product sustainability lens to ensure US$10 billion of taxpayers’ money is spent more responsibly. If this is what one organization can achieve, I am excited to think of how the GSA might lead the way to large scale use of product footprinting for sustainable purchasing by governments and private sector alike.
Remaining on a governmental theme, the Government of Quebec presented highlights of a new initiative that will invest CA$24M over 3 years to promote carbon footprint labeling in Quebec (see here). Some of the anticipated benefits of the product footprinting program are efficiency improvements and cost saving opportunities through GHG reductions, innovation, and preparing businesses in Quebec for the predicted requirements of major ordering parties, such as Wal-Mart. A clear indication of the self-fueling potential of sustainable supply chain programs, whereby a small set of leadership organizations create a domino-effect along the supply chain, encouraging and enabling sustainability action and engendering more sustainable products. Perhaps the most interesting expected benefit for Quebec is the opportunity to promote the competitive advantage that Quebec products draw from the low carbon footprint of hydroelectricity. So in this sense product carbon footprinting and labeling may enable product differentiation of exports at a national scale: raising the game for product footprinting to an entirely new level.
My presentation to the conference did not revolve around government-related schemes but instead covered how businesses can create new value from product footprinting activities. With many companies currently approaching product footprinting in a voluntary context, there has to be an evident value proposition for companies to engage and remain engaged. I believe resource efficiency, supply chain risk management and customer service are three areas where product footprinting solutions can deliver new business value. Moreover, these areas leverage many of SAP’s strengths, including our technology and the business data embodied in our solutions. Product footprinting has not historically been exploited to support these three areas of value generation, due in the main to limitations in capabilities and deployment of traditional product footprinting solutions. I believe SAP’s new product footprinting solution can help open a new world of value creation for sustainable businesses, and as such be part of the transition of product footprinting from evolution to revolution.